Heads up! Next low on Bank Nifty might be coming in first week of February

Ashish Kyal, CMT

The Bank Nifty Futures & Options is one of the most traded contracts globally. Weekly expiry has brought in a lot of novice traders in the game who have been writing options on gut feeling rather than any systematic methods.

Such traders cannot sustain in the market for long unless there is a systematic approach to trading with strict stop loss.

We believe in combining time cycles to forecast the dates of possible reversal and based on this, one can adapt strategy to trade in options very precisely rather than relying only on gut feeling, which is random and results in losses for most traders.

Bank Nifty daily chart:

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Ashish Kyal

Founder|Waves Strategy Advisors - wavesstrategy.com

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If we look at the above chart, which is plotted along with the rate of change (ROC) indicator, each of the arrows shows a reversal. These are not randomly placed but derived using advanced concepts of time cycles–Hurst Cycle methods.

We can see that the latest low is broken, which indicates that the top will not be taken out for the next six to seven days. Now with this information don’t you think there is a brilliant way to capitalise by forming an Options strategy, irrespective of the news or events.

Also, we know that the probable date of the next low on the Bank Nifty will be in the first week of February and might coincide with the event day on February 1. 

Keep a close watch on price action with time cycles to form a trading strategy accordingly.

(The author is Founder & CEO at Waves Strategy Advisors.)

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